Overseas borrowings of Indian firms sink to 19-year low at $ 210 million
Foreign currency loans by Indian companies plummeted to $ 210 million in the September quarter, down by 93.3 percent from a year ago, when five firms had raised $ 3.1 billion. The amount in the three months to September was the lowest since December 2003 quarter, when local firms had raised $ 191 million. Only two companies raised funds in the September quarter, which was marked by the Indian currency losing its value sharply against the dollar, Bloomberg data showed. In the quarter ended June, seven Indian companies raised $ 1.69 billion, while in the March quarter, 13 companies raised $ 6.9 billion.
Why it’s important: Indian companies almost stopped raising overseas funds after the Reserve Bank made it mandatory to take forward cover, reducing arbitrage. Volatility in the currency markets, a rise in US interest rates, and better funds availability in India were the main reasons behind the sharp decline.
Cellphone exports from India hit record $ 1 billion in September
Monthly mobile phone exports from India touched $ 1 billion for the first time in September. Cellphone exports in the six months to September more than doubled to $ 4.2 billion from $ 1. 7 billion in the year-ago period. The highest monthly export of cellphones was in December 2021, when devices worth $ 770 million were shipped. Exports hovered around $ 700 million a month during June-August. The estimated value of mobile phone exports in September showed a growth of more than 200 percent on an annualized basis.
Why it’s important: Cellphone exports were boosted by the government’s production-linked incentive scheme, which pushed multinationals like Apple and Samsung to increase local production for both domestic and overseas markets.
Infosys reports 11% increase in net profit, to buy back shares worth Rs 9,300 crore
IT major Infosys raised its annual revenue forecast and reported robust September quarter profit despite fears of a global recession. Profit grew 11.1 percent to Rs 6,021 crore from Rs 5,421 crore a year ago. Revenue rose 23.4 percent to Rs 36,538 crore. Infosys will pay an interim dividend of Rs 16.50 per share. It will also spend Rs 9,300 crore to buy back 1.19 percent of its shares at Rs 1,850 each, a 30 percent premium to its stock price.
Why it’s important: New large orders helped the IT firm to post robust results despite a cloudy outlook on tech spending due to the impending global recession. The fiscal second quarter performance has exceeded market expectations.
Tata group, Singapore Airlines in talks to merge Vistara with Air India
Singapore International Airlines is in talks with Tata Sons to explore the possibility of merging full-service airlines Vistara and Air India, which was recently acquired by the Tata group. Currently, the Tata group holds 51 percent stake in Vistara, while Singapore Airlines owns the rest.
Why it’s important: Tata has already secured regulatory approval to merge Air Asia India with Air India. The conglomerate is working on a consolidation strategy to save costs, optimizing aircraft utilization and routes, and gaining a larger market share to compete with market leader IndiGo.
E-way bills rise to record 84 million in September on increased economic activity
Electronic permits for transporting goods within and across states rose to a record high of over 84 million in September, official data showed. The increase also points to further improvement in GST receipts in October. E-way bill generation, which saw a spike in March, leading to record GST collection, has since remained steady and saw a further pickup from June.
Why it’s important: The increase in generating e-way bills signals a strong boost to economic activity in the festive season. Better GST compliance is also a reason.
Tata group may exit UK steel business due to lack of government support
Tata Steel could exit from its UK business as there’s little hope of £1. 5 billion in subsidies promised by the UK government to transition to green energy. Holding firm Tata Sons has said the funding was needed to replace the carbon-intensive blast furnaces with electric arc furnaces over the next few years.
Why it’s important: Funds are needed to decarbonize the UK steel mills and meet the high operational costs. Lack of government support may force the conglomerate’s hand.
Government looks to step up divestment process by selling Container Corp, Air India arms
After starting the privatisation process for IDBI Bank, the central government aims to hasten its disinvestment program by lining up strategic assets for sale and new listings. The pipeline includes Container Corporation of India and several subsidiaries of Air India that the government still owns. It is also planning to list Indian Renewable Energy Development Agency and Wapcos Ltd.
Why it’s important: The government might find it challenging to meet its divestment target of Rs 65,000 crore in 2022-23 as the IDBI sale could spill over to the next financial year.
Shriram group to file expression of interest to buy IDBI Bank
The Shriram group is likely to submit an expression of interest for IDBI Bank. It has been working on a structure for a possible bid for the state-owned lender that is being sold through competitive bidding. The financier may float a separate holding company to participate in the privatization process. Prem Watsa’s Fairfax Financial also believed to be a contender.
Why it’s important: Shriram was one of the 18 participants to attend virtual roadshows in April to brief potential buyers of IDBI Bank. Interested parties need to have a minimum net worth of Rs 22,500 crore to submit an expression of interest.
Startups with foreign holding companies consider domestic public offers
Indian start-ups that had set up overseas holding companies are reversing their strategies and considering local public offers. Some of these firms are mulling reverse flipping to bring their ownership back to India and list locally following successful IPOs by Zomato, Paytm and Nykaa. The huge correction in the tech-heavy Nasdaq has also dimmed the allure of foreign listing.
Why it’s important: The reconsideration is a result of positive changes in the domestic start-up ecosystem that is further made more attractive by policy support by the government.
Attrition in IT firms continues to rise despite reduced hiring
It could take another few quarters for the pace of employees voluntarily leaving IT companies to decline significantly. The demand for skilled talent remains high, not only from services firms but also from MNCs, keeping attrition levels above 20 percent for 2022-23, HR and industry experts said.
Why it’s important: High attrition raises staffing costs as firms are compelled to offer higher pay packages to retain talent. Hiring freshers has little impact on mid-level attrition.
